UPDATE 1-Insurer Beazley's profit hit by lower reserve releases

(Corrects paragraph 1 to say profit fell due to lower reserve releases, not because of claims from the Malaysia Airlines crash in Ukraine, destruction of planes in Tripoli and U.S. data breaches. Rewrites headline and paragraph 4 to conform.)

By Richa Naidu

Feb 5 (Reuters) - Lloyd's of London insurer Beazley Plc (Other OTC: BEAZF - news) said full-year pretax profit fell 16 percent as reserve releases declined from record highs in 2013.

The company recovered substantially more reserve money in 2013 that it had set aside to pay off claims from pre-2010 catastrophes and the credit crunch in 2008, which cost less than initially anticipated.

Finance Director Martin Bride told Reuters that claims in 2014 were actually flat on the previous year.

Claims during the year included the destruction of aircraft in Tripoli, downing of the Malaysia Airlines plane in Ukraine, Hurricane Odine and U.S. data breaches.

However, the underwriter could tap reserve releases of only $158.1 million in the year ended Dec. 31, compared with the $218 million it released in 2013.

Beazley's combined ratio in 2014 inched up to 89 percent from 84 percent in the previous year.

A ratio below 100 percent means an insurer earns more in premiums than it pays out in claims.

"Eighty-nine percent is more of a long-term average, 84 percent was an exceptionally good year in 2013," Chief Executive Andrew Horton said.

Beazley reported a 3 percent rise in net written premiums at $1.73 billion. Pretax profit fell 16.4 percent to $261.9 million.

Beazley, which provides marine, casualty and property insurance and reinsurance, also said it would pay a special dividend of 11.8 pence per share on top of a second interim dividend of 6.2 pence.

Shares (Berlin: DI6.BE - news) in the company were down 2 percent at 295.3 pence at 0958 GMT on Thursday on the London Stock Exchange (Other OTC: LDNXF - news) . (Editing by Gopakumar Warrier)